Faced with an Everest of state aid challenges, districts enlist Sherpas who know the terrain

by Alan Wechsler

On Board Online • August 14, 2017

Alan Wechsler
Special Correspondent


The William Floyd School District is one of the largest districts in Suffolk County. Named after a signer of the Declaration of Independence, William Floyd is one of the districts on Long Island that is most reliant on state aid: nearly half of its yearly $236 million budget comes from various state funds.

According to David Beggins, assistant superintendent for business, filing for state aid involves a mountain of paperwork, and it's easy for a district to fail to document everything it should.

That's why the district has been working with a NYSSBA business partner, School Aid Specialists, which specializes in state aid recovery.

"State aid means everything to us," Beggins said. "It's critical for us to maximize every state aid formula that we can at William Floyd. It is important to have an expert to help the district understand the ins-and-outs of state aid funding."

Seeking state aid without representation is like filing income taxes without an accountant, according to Brian Shea, a principal of School Aid Specialists. He and two other former school business officials formed the organization in the mid-2000s. Today, the group has worked with at least 300 school districts around the state.

Shea and his two partners - Anthony Cashara and Dave Lattuca - have similar backgrounds. They all worked in the state Legislature and later for the well-regarded state aid planning service of Rensselaer- Columbia-Greene BOCES (now known as Questar III). All three have also held top financial positions at school districts across the state.

The three partners left their district jobs at different times to become consultants, and in 2006 began working together.

"We had the perfect marriage of the theoretical and the practical," said Shea. The firm performs audits, identifies issues, and provides the kind of documentation that will result in more state aid. State officials always agree with School Aid Specialists' findings, Shea said.

"You either had those expenses, or you didn't. It's a question of claiming them," Shea said. "There are no gray areas in state aid."

However, that doesn't include situations in which a statute of limitations for filings has expired or the state defers payment on part of the aid. "If it's outside the statute of limitations, we'll instruct the district and train them not to do it again."

The company's fee is 13 to 15 percent of the new revenues found, based on the size of the district. "We've found millions, we've found $10,000," Shea said.

He noted that if an audit doesn't identify any opportunity to recover funds, there is no charge to the district. It's akin to a personal injury lawyer who doesn't charge the client a fee for representation but will take a share of any settlement or award.

Do districts routinely receive less aid than they deserve? Yes, according to Shea. Often, the district has failed to cross all the t's and dot all the i's to capture all the funding that is available.

Typical soft spots include construction reimbursements and Medicaid filings. Special education is an especially important area to look into, given the cost. "It's a back-breaker for schools. That's why it's important to get everything you're entitled to," said Shea.

At William Floyd, the importance of state aid was revealed during the crash of the late 2000's. From 2009 to 2012, the district had to cut about 250 positions, due to the cumulative loss of state aid totaling about $45 million during that time. The district has since restored about 150 of those lost positions, mainly through reorganizing, reducing BOCES expenditures (by creating in-house career and technical education programs), renegotiating contracts and other cost-saving changes.

Beggins, the school business official, said issues involving state aid go far beyond underpayments and unfunded mandates. For instance, the state doesn't always pay the full amount of state aid the year it is due. The cumulative amount of foundation aid owed to the William Floyd School District is in excess of $100 million, he said. "This remains an ongoing problem which has no end in sight," Beggins said.

Also, during the Great Recession, the state instituted the Deficit Reduction Assessment, which later led to the Gap Elimination Adjustment (GEA) to close the deficit in the state's budget. The GEA paid districts less aid than the state's own formulas dictated.

"The way they balance their books is by not paying the full allotment," Beggins said. "Which is disappointing as it shifts the burden to the local community, and in a high needs district the resources are limited."

Working closely with one of the School Aid Specialists partners, Anthony Cashara, has helped in a number of areas, he said. Cashara helped maximize transportation reimbursement payments by using bus records to track student attendance, to ensure that all applicable students were being counted. He also provided a projection of what the district can expect to receive in state aid next year, which Beggins will use to create revenue estimates that take into account possible formula changes.

School Aid Specialists also helps the district with capital project cost reporting and a form of Medicaid compliance called STAC filings (the acronym stands for System to Track and Account for Children).

The state has no less than four listserves on STAC compliance, which is part of the reason Beggins says Cashara's expertise is invaluable. "He's up in Albany all the time," Beggins said. "He's dealing with the budget office. He has relationships we could never have the time to build. He knows exactly who to call, and can project out what your category-by-category income will be."

The Buffalo City School District has been working with School Aid Specialists for about five years. The district, second largest in the state, has a $1 billion budget with 32,000 students, plus another 8,000 in charter schools.

"Our filings can be very complicated and complex," said Jim Barnes, the district's deputy chief financial officer. "They can handle the complexity of the district's population and its associated state aid filings."

Barnes, who also works with Cashara, said their first act when getting together to discuss aid was to create a large map showing the various sources of state aid. Using this guide, they broke down to the various forms that would be required for each source.

"They did a very engineered approach to understanding where the money comes from," Barnes said. "And then they identified holes in our processes where we were missing out."

With the district's annual state aid income totaling around $850 million, Barnes estimates the district received up to $1 million more due to guidance from School Aid Specialists.

In one case, Cashara discovered that Medicaid reimbursement was being rejected because of a simple lapse in paperwork.

"We don't have the internal staff to stay on top of it," Barnes said. "They help us focus our efforts."

For more information, contact Bob Schneider, NYSSBA associate executive director and chief operating officer, at (518) 783-3702.


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